Nevertheless, it prompts interesting thoughts: when does virtue signalling have purpose and what does this have to do with investing in equities? Quite a lot actually, since it’s as obvious as Jurgen Klopp’s glistening teeth that listed companies are also obsessed with signalling their virtue.
Studies of evolutionary biology tell us that virtue-signalling only has meaning if it comes with a cost. In a phrase: no cost, no virtue. This so-called ‘handicap principle’ takes the peafowl as its ultimate example. The male, the peacock, displays its virtue via its magnificent fan. What, in the wide eyes of an impressionable peahen, could be sexier? So, as a reward for its virtue, the peacock gets lots of sex. But the cost is that its ridiculously impractical tail means it can barely fly, making it an easy takeaway dinner for predators.